When filing a tax return, a taxpayer (i.e., an individual or business) generally has an opportunity to claim one or more tax deductions, also referred to as tax-deductible expenses. A tax deduction represents an expense incurred by the taxpayer, and may be subtracted from the taxpayer's reported gross income, thereby yielding a lower net income. A lower net income typically incurs lower taxes. Therefore, taxpayers are generally interested in identifying and claiming as many tax deductions as possible.
However, filing a tax return is a notoriously complex process, and it may be difficult for the taxpayer to identify all of the tax deductions available. For example, a small business owner may have difficulty identifying all of the business-related expenses that may be claimed as tax deductions. Similarly, an independent contractor may not be aware of the numerous expenses that may be claimed as tax-deductible business expenses. Therefore, each tax year, many individuals and businesses fail to take advantage of the full extent of tax deductions available to them.